Have Brand - will travel (Part 2)
Taking a broad view, the hotel industry is fortunate in that we are seeing a positive rebound in travel over the past ten years - international and domestic crises notwithstanding. Arrivals to Sri Lanka since the end of the war in 2009 have grown remarkably. The country received over 2.3 million tourists in 2018 and is targeting 3 million visitors for 2019. Fuelled by this ambitious goal, and to cater to the anticipated large influx of travelers, many hotel projects are underway with several more on the pipeline. International global brands such as Shangri-La and Mövenpick have already commenced operations, including a host of other regional brands such as Anantara, Avani and Ozo. As these new trends emerge, Sri Lanka tourism’s competitive landscape will constantly change and shift.
Hotels will compete, now, more than ever with competitors they never would have dreamed of just a few years back. Hence the frenzied dash to brand or re-brand! Unfortunately, most companies are turning to branding as a ‘quick fix ‘to meet the challenges ahead, without fully understanding the true purpose of branding. No longer is it ‘build them and they will come’, now, the popular mantra is ‘build them, brand them and they will come’……..If only it was that simple! Spending money to upgrade the building, putting up a new sign board, re-packaging room amenities, etc. is not going to make one bit of difference. A glaring example is our petrol sheds where despite the new look (incidentally the staff still wear the same insipid outfits); the service standards have not changed from the usual lethargic surly attitude.
Why Brand?
To defend against commoditization - a situation in which the company’s products and services become perceived by buyers as interchangeable with those of other companies, so buying decisions become driven by price. Competitors will duplicate in a matter of weeks or months if you have a great idea – not only will they follow your lead, but they may also be able to do a better job or sell the product or service at a lower price.
What competitive edge do I have to offer that cannot be copied by anyone else?”….your brand. Your brand is the one thing that you can own that nobody can take away from you. Everything else can be stolen, your staff, your trade secrets, your physical plant will wear out, Technology will age or change, but the Brand can go on and live….To create lasting value. Your brand is a corporate asset. Branding leads to the creation of Design, Strategy and most importantly - Identity. Brand identity leads to mind share.
Mind Share vs. Market Share
Mind share is a strong competitive advantage where the customer will think of your business first when they think of your product category. Think tissues - think of Kleenex…tape to wrap a present - think Scotch… Hamburger - McDonald’s? Got a headache? Reach for Panadeine! Rock solid brand identities trigger instant recall. Market share on the other hand is everything. Do not confuse ‘brand building’ with real results. Mindshare is only a partly-open door. Market share is total entry. Branding is an important tool to gain market share. Strong brands will definitely capture market share unlike brands who do not build a brand value proposition. These weak brands will be compelled to resort to commoditization – i.e. slash room rates and dump rooms to offset weakening demand.
Promoting purely on price will lead to brand erosion. Consider, for example, the story that comes from Michael LeBoeuf's book, ‘Fast Forward’: There was an Ohio hairstylist who charged $31 for a haircut. A discount hair cutting chain opened a shop across the street from the hair stylist; it has a large sign in the front window that read, "We give $6 haircuts." Rather than counter with a discounted price, the stylist countered with a window sign that read, "We fix $6 haircuts." And he did. If you just jump into the discounting fray, all you do is join the competitive clutter, not stand apart from it. The best way to get noticed in your market is to offer something different and better, not necessarily cheaper. That's what the Ohio hairstylist did, and he didn't lose customers.
By 2020 and In the face of likely fierce competition it would be interesting to see which of the hotel brands in Sri Lanka will stand out and attract the next customers. For sure, only those who have focused on continuous brand building with a genuine holistic approach will tower above the crowd.
In2ition |
|
|
|
